The automobile industry is one of the most significant contributors to the economy of the United States. This industry provides more than seven million jobs, constituting approximately one-tenth of the country’s revenue (Chuang & Zhao, 2019). General Motors (GM) is the largest American automobile corporation with a more than a century history of vehicle production with such major brands as Chevrolet, GMC, Buick, and Cadillac (Adriaanse, 2017). The company generated total revenue of $122.5 billion in 2020 (Wagner, 2021). Although the initial goal of GM was to make a profit, the appearance of foreign competitors and the 2008 recession demanded the company leaders reconsider its mission (LeClair, 2018). The rapid advancement of technology requires companies to adapt to these changes. GM altered its focus from profit to creating safe and fuel-efficient cars that will produce less damage to the environment (Adriaanse, 2017). Constant improvement and a wide variety of products give GM an advantage; however, its competitors also improve. Although GM remains the largest vehicle provider in the U.S., it should monitor and adjust to the advancement of the automobile industry to stay at a competitive edge.
Vision and mission of GM
The acceleration of the global automobile industry made GM leaders change their mission and vision. The mission of this corporation is to sell products that will allow gaining customers for life (LeClair, 2018). Their vision switched to create a world with zero crashes, zero emissions, and zero congestion (LeClair, 2018). The old mission of earning money resulted in poor-quality cars in the 1980s and the loss of a portion of the U.S. market to German and Japanese automobile companies delivering better vehicles (LeClair, 2018). Moreover, the 2008 economic crisis had a substantial negative impact on GM, resulting in shrinkage of its manufacturing worldwide (Adriaanse, 2017). This disruption played a significant role in the corporation’s decision to revise its mission and vision. Indeed, it is clear now from the new mission and vision that GM wants to produce high-quality automobiles that will also be environmentally sustainable. Pursuing constant improvement and innovations can benefit the company’s profitability by creating and satisfying demand (Chuang & Zhao, 2019). Therefore, GM should continue to encourage new technologies in this industry to provide customers with safe and comfortable cars that do not harm the environment.
GM’s success: Competitive advantage
GM corporation remains the most significant contributor to the American automobile industry. As previously mentioned, the company’s total revenue in 2020 was more than $122 billion (Wagner, 2021). However, this number was fifteen billion dollars lower than 2019’s revenue (Wagner, 2021). Nevertheless, GM is still making a profit and provides a greater portion of vehicles to the U.S. market. This company possesses two essential features that serve as its competitive advantage. First, GM created favorable working conditions for its employees, providing health insurance and pension payments to the firm’s workers and retirees (Adriaanse, 2017). Indeed, giving workers additional support allows building a loyal culture in the company, increasing productivity, and profitability. Second, GM is one of the most prominent investors in research and development in the automobile industry, allowing the invention of electric models, autonomous cars, and ride-sharing vehicles (LeClair, 2018). Automobiles are no longer a luxury item in modern society; thus, many young people prefer to use ride-sharing services than purchase a car (LeClair, 2018). Moreover, the younger generations became more concerned about climate change, leading to an increase in the popularity of alternative forms of fuel.
Rivals, economic crisis, and the COVID-19 pandemic
Despite being the largest automobile corporation in the United States, GM had to face several challenges in the past two decades. The automobile industry is highly competitive with such significant rivals as Honda, Toyota, and Volkswagen (Adriaanse, 2017). Their products started to become favored among Americans in the 1980s when drivers noticed a drastic difference between the quality of GM products and foreign cars (LeClair, 2018). GM had to accept that their vehicles no longer satisfied their customers, requiring a shift towards innovations. Another issue was the major recession in 2008 that caused a 30% drop in manufacturing and closure of production in some other countries (Adriaanse, 2017). The most recent disruption resulted from the ongoing COVID-19 pandemic that required many businesses to close. For example, GM reported a $200 million loss at the beginning of the pandemic (Koenig, 2020). After the pandemic, the industry’s recovery will probably become one of the primary goals for this corporation.
Conclusion
General Motors is the largest vehicle producer in the United States. During a hundred-year history, this company was able to win half of the U.S. automobile market. The mission of this corporation is to earn customers for life, while their vision is to create a different future without crashes, congestion, and emissions. The firm provides more than seven million jobs in the country. It is considered one of the largest investors in research and innovations in this industry, enabling the development of efficient vehicle-sharing services and sustainable cars that use alternative fuel. However, the appearance of strong competitors in this industry and the 2008 economic crisis reduced the scale of its manufacturing. Moreover, the coronavirus pandemic required partial closure of production, causing significant loss of profit. Although General Motors maintains its dominance in the American market, its leaders should develop an effective plan for recovery after the pandemic.
References
Adriaanse, J. (2017). Back to the future: The General Motors restructuring plan. In J. Adriaanse & J.P. van der Rest (Eds.), Turnaround management and bankruptcy (pp. 365-387). Routledge.
Chuang, C. H., & Zhao, Y. (2019). Demand stimulation in finished-goods inventory management: Empirical evidence from General Motors dealerships. International Journal of Production Economics, 208, 208-220. Web.
Koenig, B. (2020). GM posts quarterly loss on strike. SME. Web.
LeClair, D. R. (2018). General Motors: Globalization, disruption, and sustainability. In S. Iñiguez de Onzoño & K. Ichijo (Eds.), Business despite borders (pp. 165-177). Palgrave Macmillan.
Wagner, I. (2021). General Motors – revenue 2013-2020. Statista. Web.